S. 239 would modify agencies’ authority to enter into energy savings performance contracts (ESPCs), a specific type of long-term contract used to procure equipment and services to conserve energy in federal buildings. The bill also would specify new reporting requirements for federal agencies.
In CBO’s view, commitments under ESPCs create direct spending because agencies enter into such contracts without appropriations in advance to cover their full costs. On the basis of that view, CBO estimates that enacting S. 239 would increase direct spending by $504 million over the 2017-2027 period. CBO also estimates that reductions in federal agencies’ energy costs attributable to investments in energy-related services and equipment procured through contracts authorized under the bill would total $209 million over the 2017-2027 period (and additional amounts after 2027). Over that period, CBO also estimates that discretionary spending for certain services related to those contracts would total $45 million.
Because S. 239 would affect direct spending, pay-as-you-go procedures apply. Enacting the bill would not affect revenues. CBO estimates that enacting S. 239 would not increase net direct spending or on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2028.
For purposes of determining budget-related points of order for legislation considered by the Senate, section 3207 of the Concurrent Resolution on the Budget for Fiscal Year 2016 specifies how CBO should prepare cost estimates for ESPCs. Specifically, that resolution requires CBO to estimate, on a net-present-value basis, the lifetime net cost or savings attributable to projects financed by such contracts and to record that amount as an upfront change in spending subject to appropriation. Using those procedures, CBO estimates that S. 239 would not affect direct spending and would reduce spending subject to appropriation by $30 million over the 2017-2027 period.
The bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would impose no costs on state, local or tribal governments.
